Deutsche Bank analysts Marcus Sequeira and Luiz Fonseca cut the stock recommendation from “hold” to “sell.” Moreover, the target price was cut from R$6 to R$4. The new target indicates a further 25% devaluation from its already beaten-down stock, which fell another 6% to trade at R$5.36.

“We believe the risk of lower stock prices can not be ruled out,” they wrote in their report.

The analysts turned to consultants and geologists to understand the company’s blocks in the Campos basin. According to their research, “OGX has yet to prove that it is in fact ‘a low cost oil producer’ as its executives claimed in recent conference calls.”

For those who think that the oil production output in these wells can not get worse, Deutsche Bank estimates an even lower production: 4,000 barrels per day. Sequeira and Fonseca also warned that the company may have to issue more debt. In the end of the first quarter, the company had US$3.6 billion in cash but US$3.9 billion in debt with a capex of R$1 billion.